Talking Points

Selling a Small Business: “When should I tell my employees?”

“When should I tell my employees?”

Every small business owner asks this question at some point during the sale of his or her small business. There are many reasons small business owners struggle with this decision:

–          “If I tell them and the deal doesn’t close, I have caused a stir for no reason.”

–          “My competition will use this to sell against me.”

–          “If I don’t tell them, they will feel left out and betrayed.”

–          “I am just so excited about working with Hadley Capital I can’t wait to tell everybody the good news!”

 

While every situation is unique, we generally recommend a two-step process to informing employees about the pending sale of a small business:

Step 1  Tell the senior management team immediately and communicate with them regularly.  Consider including them in meetings, tours, and other initial discussions.  You may be concerned that this news will trouble your senior managers, encouraging them to start looking for work elsewhere. Nevertheless, in our experience, the opposite is true.  These trusted lieutenants know you are not going to stick around forever – whether due to age, health, or other interests like grandkids or lowering the golf handicap – and this uncertainty is more likely to get them concerned about job security.  Telling them you want to work with Hadley Capital on an orderly sale and management transition gives them confidence in their opportunity for continued growth and success.

Step 2  An announcement to all employees is appropriate after due diligence is complete, legal documents are well on their way, and a closing date is on the books.  Typically, this is around one to four weeks before closing.  However, if employees are already talking and the rumor mill is running, then it is time to inform all employees as the rumors are usually worse than the truth: “Did you hear competitor X is buying us and shutting us down”…or…“We are being sold to a foreign company.”

The reality is that the truth is a positive message:  “I am partnering with Hadley Capital to continue our great legacy, VP Smith is being promoted to run the company, we’re going to continue to expand, to hire, etc.”  Controlling this positive message is more beneficial to everybody than uncontrolled and inaccurate rumors.

 

The sale of a small business is an emotional process and one that most small business owners only do once in a lifetime. Informing the employees of a small business about the pending sale of the business can be a concern for small business owners. Hopefully our two-step process provides a framework for considering when and how to inform employees.

 

Hadley Capital Acquires New Age Cryo, Inc.

Hadley Capital recently acquired New Age Cryo, Inc., a fast-growing provider of industrial cleaning services based in Northern Illinois.  Hadley Capital acquired New Age from its founder, Brad Potts, in partnership with Brad’s brother, Jeff Potts.  New Age’s specialized services include sponge, dry ice and hydro blasting.

“We’re very excited to be partnering with Jeff to further grow and develop New Age,” said Clay Brock of Hadley Capital.

For more information about Newe Age Cryo, please visit www.newagecryo.com.

Hadley Capital and Gillinder Family Recapitalize Gillinder Glass

Gillinder Glass, a sixth-generation custom glass manufacturer, and Hadley Capital, a Chicago-based investment company, are partnering to create a platform to support Gillinder’s future growth plans.  As part of the transaction, members of the company’s management team will become owners of Gillinder Glass and Charlie Gillinder will continue as the company’s President.

“Our partnership with Hadley Capital will allow Gillinder Glass to continue to manufacture world-class products in Port Jervis and provide the support and capital required to grow our business into new markets in the U.S. and abroad,” said Charlie Gillinder, President of Gillinder Glass.

“Gillinder Glass is a market leader with a long history of providing innovative solutions to complex problems. The company is led by an experienced and dedicated team and has an amazing group of people that make Gillinder Glass a success. Hadley Capital is thrilled to support Charlie, Fred and the rest of the Gillinder Glass team with their growth plans for the next 150 years,” added Scott Dickes, Managing Partner of Hadley Capital.

Hadley Capital has a wealth of experience working with family-owned businesses on recapitalizations and generational transfers.  Please contact us if we can help your family-owned business.

More About Gillinder Glass

Established in 1861, Gillinder Glass is a custom glass manufacturer that specializes in custom-molded, hand-pressed, clear and colored glass as well as optical prism processing and engineering.  Gillinder Glass is based in Port Jervis, New York.

The company’s web address is www.gillinderglass.com.

 

Hadley Capital Acquires S&S Filters

Hadley Capital recently acquired S&S Filters, a manufacturer of specialty filter bags and related products. Hadley Capital acquired the company from its founder, allowing him to transition out of day-to-day management and his achieve his personal financial goals.

Hadley Capital assists the founders of small businesses with transition through the sale of their companies. If you are a small business owner that is considering a sale of your company, please contact us to see if we can help you realize your goals.

More about S&S

S&S Filters is a manufacturer of specialty filter bags and related products. Pharmaceutical companies, food products manufacturers and other industrial producers such as asphalt plants use S&S’s filters to recover small particles in static sensitive, high temperature and/or chemically aggressive environments. S&S is known for its deep product know-how, large stock of high performance fabrics, high quality fabrication and fast delivery.

S&S is based in Union, NJ, near New York City.  The Company’s websites are www.shafferproducts.com and www.summitfilter.com.

Hadley Capital Acquires Pneumatic Conveying, Inc.

Hadley Capital recently acquired Pneumatic Conveying, Inc., a manufacturer of  turnkey and custom pneumatic conveying systems.  Hadley Capital acquired the business from Wayland Gillespie, in partnership with Wayland’s son, Warren Gillespie.  Wayland founded Pneu-Con nearly 30 years ago.  Hadley Capital and Warren Gillespie plan to develop a long-term plan for building on Pneu-Con’s reputation for deep engineering expertise and manufacturing high-quality systems that perform to specific application demands.

Hadley Capital has a wealth of experience working with family-owned businesses on generational transfers.  Please contact us if we can help your family-owned business.

More about Pneu-Con

Pneu-Con designs, manufactures and installs turnkey and custom pneumatic conveying systems that serve as a critical component of dry bulk material handling systems.  Pneu-Con serves a broad spectrum of the commercial economy including food, plastic, pharmaceutical, nutraceutical, chemical, and agriculture industries, among many others.  Pneu-Con is based in Ontario, California, east of Los Angeles.

The Company’s web address is www.pneumaticconveyingsolutions.com.

Hadley Capital Raises Third Small Company Fund

Earlier this year Hadley Capital announced the closing of our third small company fund.

For nearly 20 years, we have focused exclusively on buying small, profitable companies. We have been very successful at helping families address generational transitions, founders complete recapitalizations and management teams buy out inactive owners or founders. Read some of our success stories.

Just like in our prior funds, we are big investors in our third fund and our interests are well aligned with our investors and the business owners and management teams that we work with to improve and grow small companies.

If you own or represent a small company that meets our criteria, please contact us to discuss how we can help your company achieve its goals.

Hadley Capital Acquires GT Golf Supplies

Hadley Capital recently acquired GT Golf Supplies in partnership with its founder, Craig Pollard, and the company’s management team. Craig approached Hadley Capital about partnering with him in order to develop a long-term plan for growing the company while also providing him with a mechanism to achieve some personal financial planning goals.

GT Golf Supplies sources and sells grips, tees and other accessories to golf courses, golf course management companies and off-course retailers.  The Company is known for its broad product offering, short lead times, competitive pricing and excellent customer service.  GTG is based in Vista, California, near San Diego, with a second warehouse located near Charleston, SC.  The Company’s web address is www.ggolf.com.

GT Golf Supplies is actively seeking acquisitions of distributors of golf accessory products. If you own or represent a company that may be a fit with GT Golf Supplies please contact us.

Acquisition Profile – Niche Product or Service Companies in Midwest

Hadley Capital is working with an experienced executive to identify and acquire niche product or service companies with the following characteristics:

  • Market leadership in a niche or expanding market segment
  • Branded products or services with strong market awareness
  • Located in/around Chicago, Milwaukee or Cincinnati or easily relocatable
  • Revenue of $5 – $15 million and a history of profitability
  • Sample markets of interest include automotive or motorcycle parts, consumer products or services, car wash equipment and operators, B2B or B2C niche rental businesses, financial technology and applications, among others

Our executive partner has broad senior management experience and is looking for a business to invest in and subsequently manage in partnership with a strong team.

Contact us if you own or represent a company that would be a good fit for this targeted acquisition search. Hadley Capital will pay success fees for select introductions.

 

Acquisition Profile – Value Added Distributor

Hadley Capital is working with an experienced executive to identify and acquire value added distributors with the following characteristics:

  • Market leadership in a niche or expanding market segment
  • Source of consolidated supply for a large number of products
  • Large, fragmented customer base that relies on distributor for products and service
  • Sells owned and distributed product
  • Leverages systems to improve service, delivery and profitability
  • Service component of sale protects business from digital disintermediation
  • Revenue of $5 – $35 million and a history of profitability

Hadley Capital has a successful track record of acquiring and growing value added distributors in industries as varied as gardening seeds, beekeeping products, and eyewear.

Our executive partner has experience in a wide variety of distribution businesses from healthcare to industrial products and a deep finance background.

Contact us if you own or represent a company that would be a good fit for this targeted acquisition search. Hadley Capital will pay success fees for select introductions.

Acquisition Profile – Industrial Products Manufacturer

Hadley Capital is working with an experienced executive to identify and acquire an industrial products manufacturer with the following characteristics:

  • Market leadership in a niche or expanding market segment
  • Branded products with strong market awareness
  • Multiple channels of distribution (direct, distributor, catalog, etc.)
  • Proprietary, company-owned product designs
  • Revenue of $5 – $35 million and a history of profitability
  • Sample company types include capital equipment manufacturers, material handling products, packaging products and packaging equipment manufacturers, and building products

Our executive partner has more than 20 years experience in diverse industrial markets, leading smaller industrial companies and building and empowering teams to grow revenues and improve operations.

Contact us if you own or represent a company that would be a good fit for this targeted acquisition search. Hadley Capital will pay success fees for select introductions.

Older Posts »